PACRA Maintains Entity Ratings of Pakistan National Shipping Corporation

The ratings reflect PNSC's strong ownership - majority owned by the Government of Pakistan (~87.3%) - and its strategic significance as the country's flag carrier. On a stand-alone basis, PNSC’s business profile has gained significant strength in recent years on account of efficient fleet utilization and cost management measures taken by the management. The company's governance body has undergone considerable changes. Business volumes beginning FY18 have witnessed a contraction on the backdrop of the reduction in furnace oil imports. Additionally, this has impacted the company's revenue from the Pakistan State Oil (PSO). Currently, the company operates through a fleet of managed and chartered-hire vessels to stimulate business volumes. It now embarks on emerging into "white oil" import with an aim of increasing its owned fleet size, by acquisition of three (3) more vessels. The expansion would majorly be financed through debt; thus leveraging is expected to go high, however, this would also boost up the revenue base and is likely to generate higher margins than that currently emanating from chartered-hire vessels. This, along-with on-balance sheet liquidity, supports the overall risk profile of the company.

The ratings are dependent on the Corporation's ability to generate envisaged cash flows post-expansion. Meanwhile, any change in debt matrix stressing the financial risk profile may have a negative impact on the ratings.

About the Entity
PNSC, majority (~87.3%) owned by the Government of Pakistan (GoP) through Ministry of Maritime Affairs, functions as a holding company with 19 wholly owned subsidiaries and an associate. PNSC group, operating on a one-ship one-company model, is principally engaged in transportation of liquid cargo and dry cargo including slot chartering and bulk-cargo, catered through charter-hire arrangements and owned vessels. The Corporation is currently managing a fleet of nine vessels, comprising five bulk carriers and four oil tankers with a total carriage capacity of 681,806 DWT.

Mr. Rizwan Ahmed, the Chairman and CEO of PNSC, joined the Corporation in Dec'17. He has worked on various key positions in the federal and provincial governments. He brings with him vast professional experience in administration, finances, management, human resource, law enforcement and public procurement. He is supported by a team of experienced individuals having long association with the Corporation.